(29 November 2021) Tackling multiple crises calls for more public interest regulation, not less. In many areas corporate investors are able to dominate policy-making and undermine protections that are needed to safeguard people and the planet. Corporate-friendly ‘domestic discipline’ rules being negotiated in the World Trade Organisation (WTO) and elsewhere are a latest example.
What exactly these ‘domestic discipline’ rules are and why they pose a problem, where they come from, and how they (re)appear in multiple trade contexts, was the focus of Prof. Markus Krajewski’s (University of Erlangen-Nürnberg) new study “Trading away public policy space? Assessing the risk of enhanced domestic regulation disciplines in trade and investment agreements for public interest regulation.”
Prof. Krajewski’s presentation outlined the key aspects and risks of domestic disciplines. As he said: “Disciplines for domestic regulations in trade agreements aim at locking-in regulatory models facilitating market access for foreign investors and free trade. They often go beyond just “cutting red tape” and may threaten the policy space for regulation in the public interest.” In the fora where domestic disciplines are negotiated (largely in secret) corporate lobbyists target unwanted regulations, develop business-friendly regulatory templates and increase pressure to commercialise public and essential services.
Commenting on Prof. Krajewski’s study, Scott Sinclair, former Director of Trade Policy at the Canadian Centre for Policy Alternatives (CCPA) and Kinda Mohamadieh, legal adviser and senior researcher with the Third World Network (TWN), both emphasised that policy space is vital(*) for developed and developing countries. Corporate capture of policy-making poses however more acute risks for developing countries that may have weak governance structures. This can make it difficult to regulate new services, and especially new public services, that rely on a high level of regulation in order to ensure access and availability.
There has been resistance to corporate demands regarding domestic disciplines and e.g., there is not yet a ‘necessity test’ for new (public interest) regulations in the WTO. However, straight-jacketing public interest regulation and overly-protecting business (e.g. also through investor-State dispute settlement) remains an on-going objective of the trade liberalisation agenda.
We can do much to influence and limit the reach of the trade agenda, but other (binding) agendas are needed to tackle e.g., climate change, reduce poverty, enforce labour and human rights and achieve social justice. Unlike the trade agenda, these agendas are often based only on rhetoric and lack the solid (public interest) regulation to back them up.